Read the blog post http://adnews.ms/eS9j9s about our online shopping research conducted with digital agency Carat. Read insight into consumer shopping habits in the US and understand the journey online shoppers traverse for their retail therapy.

1. The New Shopper
Today’s Purchase Path
and the Media that Influences It

2. THE NEW SHOPPER JOURNEYS:
How Touchpoints Lead to Purchase
Shoppers’ purchase paths have changed, thanks to the
This research collaboration between recession and the influence of digital. We set out to
understand today’s purchase path and the media that
Carat and Microsoft sought to define influences it. We surveyed shoppers on their most recent
the structure of consumers’ paths shopping purchases across five key retail categories:
apparel, quick service restaurants, groceries, home
to purchase and how different touchpoints electronics, and home improvement.
play a role in shaping decisions as to where This study is unique in the comprehensiveness of its data
which address these business questions:
and what to purchase. • What shapes people’s buying decisions?
• How are shoppers influenced by both offline, online,
and in-store media across key verticals?
• What is the relative influence of Owned, Bought, and
Earned media?
• What innovative forms of advertising might shoppers
be open to?
The study was done in two phases by UK-based Essential
Research. A qualitative study composed of interviews
and shopper observations was fielded in late fall 2009.
Its insights led to an online survey in March 2010 which
queried shoppers about their last purchase occasion in
each of the retail sectors covered. This quantitative phase
was done just as economic recovery began to be felt. Thus
the study uncovers new behaviors shoppers have adopted
in reaction to tighter budgets. Further analyses reveal that
many of these new behaviors will continue as shoppers
have discovered the ease in which essential information
can be accessed through the Internet. Here is a summary
of these enduring value-seeking behaviors we found.
HierarcHy of SHopperS’ New BeHaviorS
Hierarchy of tactics for coping with the recession
» Discount coupons used more often
Seeking Better Value » Price more important than brand/quality
» More time looking for special promotions
» Visiting a number of retailers to find the best deal
More Advance » Reading online forums/consumer Web sites
Purchase Research
» Discount stores
» More online shopping/auctions
Using Different » Mobile
Channels
» Fewer visits to retailers
Reduced Volume
» Peer reviews — 1:1 and through social media
Word of Mouth
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3. WHaT SHaPES PEOPLE’S bUYiNg dEciSiONS
The process that shoppers go through has forever
changed, becoming more complex and multifaceted. No Contacts
dRivERS Of
longer do shoppers traverse a linear path; rather we see a Consumer
highly dynamic journey to purchase, one characterized by PURcHaSE
reiterations in product considerations, i.e., a tumbler effect
Contacts
Contacts
Category Context
» Category » Product/Brand
rather than a funnel. » Culture » Country
» Contacts » Touchpoints
We identified five general drivers shaping shopper Culture » Context » Need states
journeys, or Five C’s: the retail category, the culture of the » Consumer » Attitudes
Contacts
market, the contact points or channels, the context or
need states for buying, and the consumer’s attitude within
the category.
The study revealed three basic patterns in shoppers’ paths to purchase across all the retail sectors we examined:
Habitual: The Impulse: Purchase Research:
item is one was unplanned The shopper
the shopper or did not have did some
normally buys enough time research prior
to research or to buying
comparsion shop
before purchasing
The distribution of these types of journeys varies by retail sector. Not surprisingly, the more involved categories like
home electronics and apparel tend to have more research journeys while lower involvement sectors like groceries
and quick service restaurants (QSR) invite more habitual journeys.
THe DiSTriBuTioN of SHopper JourNey Type By reTail SecTor
17% Habitual
66% 60% 20% 43% 37%
28% Impulse
40%
22% 34% 63%
35% Research
12% 6% 17%
Grocery QSR Home Apparel Home
Electronics Improvement
MoST coMMoN NeeD STaTe By caTeGory
The specific context or need state can also influence
the journey type as the following table shows:
Category Most Common Trigger Split by Journey Type
(% of all journeys) (Habitual/Impulse/Research)
Groceries Replacement: 43% 85% / 9% / 6%
Home Electronics Treat: 39% 15% / 17% / 68%
Clothes, Shoes, and Accessories Treat: 36% 33% / 57% / 10%
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4. If we understand the interplay across these drivers we can determine the shopper journey type which in turn can
guide more effective creative and media strategies. Indeed, when we break up a journey into stages, we can get a
broad view of how different touchpoints influence shopper decisions.
THe New STrucTure of SHoppiNG JourNeyS
Word-of-Mouth Feedback Loop
Need State Research Purchase Post Purchase
In-store Research
‘Pre-tailing’ Retailing ‘Post-tailing’
What is noteworthy is the significance of the post-purchase stage which can influence future shopping especially in
highly-researched categories like home electronics. It is also at this stage where digital media are key enablers. So
the new schematic in shopper journeys is one where post-purchase activity, typically word of mouth, loops back to
influence succeeding purchases.
WiSdOm fROm PSYcHOgRaPHicS
For new shopper journeys, one of the most useful approaches to determining the proper media mix is through
segmentation analyses which layer attitudinal variables over behavior. To understand how attitudes may further
impact touchpoints’ influence, we segmented shoppers according to their relationship with technology:
1) Cutting Edge, 2) Early Adopter, 3) Judicious Timer, and 4) Laggard.
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5. We also looked at the touchpoints that influence these segments.
From this analysis, we found that Cutting Edge shoppers were receptive to a wider array of channels while Early
Adopters were more likely to be influenced by word of mouth particularly from experts as the following table
reports. The large differences in media consumption by segment have clear implications for media strategists.
ToucHpoiNTS raNkeD By iNflueNce aT TriGGer STaGe (iNDeX)
uS HoMe elecTroNicS SHopperS
100=All US Cutting Edge Early Adopter Judicious Laggard
Home Electronic Shoppers Timer
19% 23% 32% 25%
Advertising 145 119 83 68
Word of mouth 100 132 100 71
Something seen while shopping 151 99 90 75
Newsletter/E-mail 162 108 97 49
TV ads 182 111 65 72
Internet ads 150 131 70 70
Newspaper ads 144 130 96 43
Expert reviews online 108 149 114 30
Seeing someone with item 157 156 60 55
Past experience 129 122 78 85
Promotion seen while shopping 165 94 96 61
Something read/seen online 125 105 113 60
Q: What influenced you to start thinking about your purchase?
When we combine behavioral and attitudinal variables, we get a more comprehensive view of the entire purchase
path. The following model depicts how consumers and contacts lead to the final purchase decision.
THe New DyNaMic fraMework
for uNDerSTaNDiNG THe purcHaSe paTH
Consumer Behavioral Differentiation Attitudinal Fine-Tuning by Vertical
Thinking about the last time Multivariate segmentation based
you bought . . . upon category-specific psychographics
which statement best describes
your actions? For Example:
Three types of journeys: Home Electronics: Apparel:
• Habit • Expert • Fashionista
• Impulse • Novice • Clueless
• Research • Trend-Chaser • Quick and Easy
Contacts Extensive, granular touchpoints including online, social media,
word of mouth, situational settings, traditional media and advertising
Consideration Touchpoints Purchase Venue
• Initial Media Impetus • Various Retail Outlets
for Purchase Process Online and Offline
Research Source Mobilization Post-Purchase Behavior
• For Information and Inspiration • Feedback and Word of Mouth
Factors on Final Decision through Social Media and
• Price, Location, Availability, etc. Interpersonal Channels
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6. THE ROLES Of OffLiNE aNd
ONLiNE TOUcHPOiNTS
Now that we have a framework that helps us understand how purchase
decisions are made, we can begin to map the appropriate touchpoints
along the shopper’s journey. The type of journey will indicate which
touchpoints hold sway at specific points along the path. We found that
offline and online media serve truly differentiated roles. This underscores
the need for both in order to drive purchase.
Here is an illustration of how channels serve different points along the
three types of journeys in the purchase of computers/laptops:
iNflueNTial TriGGerS for HoMe elecTroNicS – HaBiTual
Print media are most NeeD STaTe purcHaSe poST-purcHaSe
influential in pre-
purchase while mobile advertising:
phones do well at the Online: 17% recommended:
TV: 17% Brand: 48%
point of purchase.
Newspaper: 24% Retailer: 30%
Habitual purchases are Magazine: 17% Used mobile phone: 54%
fueled by loyalty. So it Newsletter: 19% Compared prices: 30% word of mouth online:
makes sense that such Searched for info: 20% Blogged online: 11%
in-store: Posted on
journeys spur more Flyers: 13% social network: 11%
active recommendation News story on TV: 11% Posted on a review: 11%
and online postings word of mouth:
post-purchase. Expert reviews online: 7%
From friends: 15%
iNflueNTial TriGGerS for HoMe elecTroNicS – reSearcH
The Internet and word
NeeD STaTe reSearcH purcHaSe poST-purcHaSe
of mouth dominate
across all phases of advertising: Used Internet: 64%
the journey. Moreover Online: 16%
advertising: recommended:
nearly 2/3 of research TV: 15% Used mobile
Online: 10% Brand: 36%
journeys depend on the Newspaper: 13% phone: 26%
TV: 14% Retailer: 19%
Internet for information. Coupons: 11%
Newspaper: 15%
word of mouth
Interestingly, having word of mouth: Compared
In-store promo: 15% online:
done a lot of research Expert reviews prices: 18%
Posted on
online: 12% word of mouth:
prior to visiting a store, social network: 8%
From friends: 28% To friends: 35%
this journey type is least
likely to be influenced
by in-store channels.
iNflueNTial TriGGerS for HoMe elecTroNicS – iMpulSe
Advertising is least likely NeeD STaTe purcHaSe poST-purcHaSe
to trigger intentions
to shop; rather it is advertising:
Online: 6% recommended:
coupons or a store’s Brand: 37%
TV: 12%
sales personnel that Used mobile phone: 41% Retailer: 25%
Newspaper: 12%
can move shoppers Compared prices: 18%
Coupons: 18% word of mouth online:
Searched for info: 14%
to purchase. Talked to Blogged online: 8%
sales assistant: 18% Posted on
word of mouth: social network: 0%
From friends: 20% Posted on a review: 8%
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7. TOUcHPOiNTS fOR LOW vERSUS HigH iNTEREST caTEgORiES
In a highly engaging category like home electronics where research accounts for 68% of the journeys, the
usefulness of online media is readily apparent. It is harder to understand online’s role in low involvement categories
like groceries unless we have the data to explain it. Using our purchase path framework we can identify specific
channels’ roles at each point of the path. Here is an example from the US. As this analysis shows we can account for
the relative influence of various media channels, offline, online and in-store.
uS woMeN Grocery SHopperS
Shopping patterns
pre-purchase purchase after-purchase
by Shopper Types
factors decided before Habitual buyers Factors that influenced after-purchase Behaviors
research or shopping (72% of total): choice of store
What did you do
after purchase?
Which items to buy 63% What inspired you to
How much to spend 39% try different products or Proximity 66% Discussed the purchase
brands? with friends/family 19%
Location of the store 28% Price 63%
Payment methods 23% Coupons 47% Recommended
Speaking to Quality of products 44% the brand/product
Number of items to buy 22%
friends/family 41% Familiarity with to friends/family 17%
Promotion seen the retailer 40% Recommended
Need state while shopping 40%
touchpoints focused Past positive experience 34% the retailer to
on new product trial TV ads 37% friends/family 8%
In-store coupons 35% Deals and promotions 35%
Factors that influenced you Samples/product demo 28% Variety of products
to purchase items that are available 32%
new or different from what impulse buyers
you normally buy (17% of total):
Speaking to
friends/family 46% What made you
Coupons 45% make a purchase?
Television ads 44% TV ads 40%
Promotion seen Promotion seen
while shopping 36% while shopping 35%
Samples/product demo 34% Speaking to
Sign/display, etc. friends/family 33%
seen while shopping 31% Coupons 31%
In-store coupons 27% In-store coupons 20%
Sign/display seen
while shopping 18%
In-store flyers 16%
researchers
(11% of total):
Sources mobilized
for research
Newsletter/leaflets/
coupons 60%
Ads/sponsorship 49%
Discount coupon 46%
Internet 31%
Word of mouth 31%
Newspaper Ads 5%
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8. iNflueNce of oNliNe cHaNNelS
Another interesting iN New Grocery proDucT iNTroDucTioNS
finding was online 45%
channels’ ability to
31% 30%
influence the purchase of
new brands. 14%
7% 6%
a B c
Q: Thinking about the last time you bought
groceries and personal care products, did you buy
anything that was new or different from the items
you normally buy?
Bought new items
Didn’t buy any new items
A Used cell phone in-store
B Used the Internet
during research
C Exposed to online advertising
during research
iNfLUENcE Of OWNEd, bOUgHT,
aNd EaRNEd mEdia cOmPaREd
HoMe elecTroNicS: A frequent conundrum for marketers is determining the right mix of
reSearcH JourNeyS channel types. To simplify the analysis we grouped all the channels
by type to see how and where they play within a journey as the
% of those who changed their mind following table illustrates.
about the brand after research
owNeD 56% For example, among research journeys in the home electronics
BouGHT 62% category we found that Bought media actually have a slightly
earNeD 47% heavier influence than Owned or Earned media when it comes to
% of those who changed their mind choosing brands or stores (contrary to conventional wisdom, this
about the retailer after research study documents the value of Bought media advertising beyond the
owNeD 64% usual considerations of audience reach).
BouGHT 60%
earNeD 47% The following table compares these three types of touchpoints in
their ability to shift shopper choices.
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9. SOciaL mEdia cHaNNELS cOmPaREd
Social networks attract considerable attention among marketers because of the large audiences they draw and their
perceived lower cost. Our study found that when it comes to influence it is actually personal 1:1 conversations via
phones, e-mail, and instant messaging which are more heavily relied upon in purchase journeys than comments or
reviews in social networks.
Below lists the top three social media forms for each retail category.
raNkiNG of Social MeDia % of all JourNeyS
TypeS By uSaGe wiTHiN iNflueNceD By aN oNliNe
reSearcH JourNeyS BloG poST, foruM coMMeNT,
or SoMeTHiNG reaD oN a
GROCERIES
Social NeTwork
1 Home Phone (47%)
2 Social Net (39%) 5%
3 Mobile (31%)
QSR 4%
1 Mobile (67%)
2 E-mail (58%)
3%
3 Social Net (43%)
Apparel
1 Mobile (42%) 2%
2 Home Phone (38%)
3 E-mail (32%) 1%
Home Electronics
1 E-mail (42%) 0%
2 Mobile (39%)
3 Home Phone (31%) Grocery (5%)
Home Improvement Fast Food (2%)
1 Mobile (48%) Home Electronics (3%)
2 Home (38%) Clothing, Shoes, and Accessories (2%)
3 E-mail (30%) Home Improvement (1%)
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10. REcEPTiviTY TO EmERgiNg fORmS
Of cHaNNEL ENgagEmENT
We asked what newer forms of brand/store engagements shoppers would be most open to. We posed different
possibilities to respondents and we found a greater acceptance of e-commerce followed by payments via
mobile phones.
% wHo woulD Be MoST williNG To Do iN THe fuTure
(Top BoX MeNTioNS)
80%
60%
40%
20%
0%
Shoppers are most interested in Make purchases online Use a mobile phone to interact
online purchasing. The next ranked Send pictures/videos with a billboards/displays
applications in desirability involve of a potential purchase Ask for views from people
mobile communications suggesting to friends or family you don’t personally know online
new opportunities to impact
Use a mobile phone Make purchases from a mobile phone
shopper decisions closer to the
to research information I would be interested in making
point of purchase.
while at a store payments using mobile phone
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11. fiNaL WORd
The old Purchase Path is gone. Study results have clearly established the existence of a new, more dynamic
Purchase Path that is driven by the power of differentiated touchpoints along a shopper’s journey. Further, the
type of journey depends on the segment that a consumer is in, so media must be planned accordingly.
Only by fully taking into account the dynamics of the new Path, can today’s marketers attain the best ROI for
their offline and digital investments.
The New Shopper Journeys contains an exhaustive database of media behavior and the purchasing that
results from it. As such, researchers at Microsoft Advertising, Carat, and their clients can mine these data to
determine effective channel mixes for offline, online, and in-store media on both global and local levels.
offliNe oNliNe iN-STore MeDia
For more information about this study, please contact:
Beth Uyenco, Global Research Director, Microsoft Advertising, bethu@microsoft.com
Mike Hess, EVP for Insights & Analytics, Carat US, Mike.Hess@carat.com
DeTailS oN MeTHoDoloGy
• Qualitative Study: Fifteen in-depth shopper interviews and shopping observations were conducted in the US,
United Kingdom, Mexico, France, Japan, and China covering the five retail sectors. In addition, respondents
completed shopping diaries.
• Quantitative Study: Online surveys among those aged 16 or older were completed in 17 countries.
Sample size in the USA was 2,680.
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